In the dynamic world of investment, Cathie Wood is a name that shines brightly. Wood, born in 1955, began her career in finance in the late 1970s. She gained recognition for founding Ark Invest ETFs in 2014, known for investing in innovation and disruptive technology. Renowned for her keen eye for pioneering and disruptive companies, Cathie Wood established herself as a vanguard in identifying growth stock picks that promise substantial returns.
Her investment strategy, marked by high volatility, targets companies with strong growth potential. These often include sectors like electric vehicles, biotech and remote telecommunication. This approach, pro-cyclical in nature, performs well in optimistic markets but may falter in downturns. However, it attracts investors seeking resilient portfolios.
Wood’s portfolio selections seek to redefine sectors and ensure robust growth. Investors use Wood’s picks for guidance, navigating the stock market’s volatility and achieving substantial gains along the way.
Despite recent challenges, Wood remains optimistic about significant financial returns. She believes in the transformative power of radical innovation in various fields. This article explores three growth stocks chosen by Cathie Wood. Each is unique and showcases her savvy investment strategies.
This isn’t just a list of growth stock picks; it’s a lesson in smart investing from a top expert. Let’s plunge right in and delve into the top selections made by this outstanding investor.
Teradyne (TER)
Teradyne (NASDAQ:TER), an automated test solutions leader, has showcased remarkable strength in 2023 with a 9% year-to-date return. Importantly, this robust growth is highlighted by the company’s consistent outperformance in earnings per share. Specifically, Teradyne exceeded estimates in each consecutive quarter.
Furthermore, in a strategic development, Teradyne is partnering with Technoprobe. That collaboration, focusing on enhancing semiconductor test interfaces, is expected to drive significant growth and innovation in the tech sector.
Financially speaking, Teradyne’s 2023 performance has been notable. Initially, the company reported a revenue of $618 million in the first quarter. Then, in a positive turn, revenue increased to $684 million in the second quarter and, impressively, rose further to $704 million in the third quarter. The consistent upward trajectory in revenue underscores Teradyne’s resilience and potential for growth in a challenging market environment.
As a prominent growth stock in Cathie Wood’s portfolio, Teradyne stands out for its solid financial performance and innovative approach among growth stock picks. Accordingly, its trajectory in the tech industry, characterized by steady growth and impactful partnerships, makes it a compelling choice for investors focusing on growth stock picks.
Twilio (TWLO)
Twilio (NYSE:TWLO), a key player in Cathie Wood’s portfolio of growth stocks, has shown notable resilience in the tech sector with a 32% year-to-date return. In February 2023, Twilio restructured into two divisions: Communications and Data & Applications, a move reflecting its commitment to innovation and efficiency.
Despite missing earnings expectations, Twilio reported a 5% increase in year-over-year revenue to $1.03 billion in the third quarter of 2023. The company also saw a 76% improvement in its GAAP loss from operations during the same period. Additionally, Twilio has been active in share repurchases, buying back over $620 million worth of stock, underlining its confidence in long-term growth.
The year also witnessed strategic changes at Twilio, including the divestiture of its ValueFirst business and the resignation of Elena Donio, president of Data & Applications. However, Twilio’s third-quarter non-GAAP earnings exceeded estimates, and the company effectively reduced costs, highlighting its focus on financial stability and growth.
For the fourth quarter of 2023, Twilio forecasts revenues between $1.03 billion and $1.04 billion, with non-GAAP earnings per share projected between 53 and 57 cents. This outlook positions Twilio as a strategic and stable component of Cathie Wood’s growth stock selections, poised for continued success in the evolving tech landscape.
Iridium Communications (IRDM)
In the dynamic world of satellite communications, Iridium Communications (NASDAQ:IRDM) shines as an emblem of innovation and resilience. Even in the face of a 26% year-to-date return loss, Iridium’s strength lies in its global voice and data services. These services extend a lifeline to remote and challenging terrains, catching the eye of visionary investors like Cathie Wood.
Reviewing Iridium’s recent financial performance, it reported a modest net loss of $1.6 million. However, its Operational EBITDA shines with a robust 12% increase, proving Iridium’s unwavering strength. Additionally, the company achieved an impressive 13% surge in billable subscribers, with a clear focus on the Commercial IoT Data sector, indicating a robust market expansion. Notably, the U.S. government remains a steadfast and dependable revenue source, even amid a slight dip in subscribers.
Challenges do present themselves, though. Iridium grappled with a 27% decrease in equipment revenue. Nevertheless, the horizon is promising, with the Engineering and Support segment showing notable growth. Looking ahead to 2023, Iridium sets its sights on a 10% surge in service revenue and an operational EBITDA in the ballpark of $460 to $465 million, underscoring its potential for continued growth.
What truly elevates Iridium is its strategic positioning, particularly in areas historically underserved by conventional communication infrastructure. That aligns seamlessly with Cathie Wood’s investment philosophy. In essence, Iridium Communications emerges as an illustrious luminary in the satellite communications sector. It is poised to seize its unique strengths and capitalize on unprecedented growth prospects in the years to come, including in the realm of growth stock picks.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.